National Grid ESO pledges £2bn savings in RIIO-2 plan

National Grid ESO has set out its priorities for the RIIO-2 period, promising an annual £3 reduction on every consumer bill.

The ESO pledged net benefits of £2bn over five years, achieving savings through lower balancing costs, avoided network investment and industry efficiencies. The lower balancing costs will be achieved through better control of the electricity system, leading to savings of £210mn and reduced emissions, while £466mn will be spared through avoided network costs and constraint cost savings. A further £663mn will come from transforming network planning by introducing competition between network and commercial solutions.

The ESO’s plan is built around four key themes: ensuring reliable, secure system operation to deliver electricity when customers need it; transforming participation in smart and sustainable markets; unlocking consumer value through competition; and driving towards a sustainable, whole energy future.

It set out a series of key outputs around these themes that it noted will be crucial to meeting the country’s 2050 net zero target. These include new Control Centre architecture and systems to operate a zero carbon network by 2025; new area monitoring and control systems, to ensure power system stability in a low-carbon world; and new market and auction platforms to promote competition and enable participants as small as 1MW to participate. It also outlined plans for a digital engagement platform to provide a single point of contact for all ESO data and services to enable a step change in data use and sharing across the industry; new competitive processes to ensure asset and non-asset solutions can compete to meet future transmission needs; and a streamlined network connection process across the whole of the electricity system.

The ESO said that its proposed spending within the first two years of RIIO-2 was, on average, forecast at £257mn a year. This includes £60mn of proposed new investment along with continued delivery and enhancements to the processes and systems it uses to carry out its core role. On average, the ESO said its plans would add £1.80 to a consumer’s annual energy bill over the RIIO-2 period.

National Grid ESO